Nigerian telecom operators have formally begun migrating banks to a brand new billing system that enables prospects to make quick codes or Unstructured Supplementary Service Information (USSD) transactions straight from their airtime steadiness. Previously, banks deducted USSD charges from prospects’ financial institution accounts however typically didn’t remit funds to telecom suppliers. The brand new billing comes into place following the cost of a long-standing ₦180 billion debt owed by 13 banks to operators.
In line with Gbenga Adebayo, president of the Affiliation of Licensed Telecommunications Operators of Nigeria (ALTON), three banks nonetheless in debt have opted for instalment funds that are nearing completion.
“I’d say 95% of the USSD debt has been paid pre-API,” Adebayo mentioned, noting that the compensation has enabled the gradual rollout of end-user billing, the place prospects will now be charged from their airtime after every profitable USSD session. The migration began with one financial institution; the remainder of the banks will likely be migrated as quickly as a Service Degree Settlement (SLA) is signed.
For over 5 years, telecom suppliers had prolonged USSD infrastructure to banks, enabling tens of millions of Nigerians—particularly in underserved areas—to carry out easy banking transactions comparable to checking balances, transferring funds, and shopping for airtime utilizing function telephones. Nevertheless, a deep monetary rift emerged when banks, regardless of billing prospects for these transactions, stopped remitting funds to telecoms for using their infrastructure.
By 2024, the debt had ballooned to over ₦250 billion ($166.67 million at ₦1,500/$).
Initially, USSD companies have been priced comparably to SMS charges. Banks used this to push cellular monetary entry to tens of millions, and inside a 12 months of rollout, over 20 million new customers have been added to the formal monetary system, based on Adebayo. Nevertheless, as utilization grew, banks noticed a enterprise alternative. They lobbied regulators—the Central Financial institution of Nigeria (CBN) and Nigerian Communications Fee (NCC)—to zero-rate USSD companies to advertise monetary inclusion.
But, prospects continued to pay for his or her transactions, making a mismatch: banks earned income from a service they claimed had “no value,” however refused to pay telecoms for the infrastructure they used.
Regardless of a 2020 joint public round mandating that banks pay ₦6.98 per USSD session, compliance remained low. One revealing incident in Abuja noticed a financial institution government deny that his financial institution charged for USSD, just for a dwell demo to show that prices have been certainly deducted from a consumer’s account moments after a transaction.
How end-user billing works
To resolve this monetary gridlock, the CBN and NCC launched a brand new mannequin: as an alternative of banks deducting USSD charges from buyer accounts and remitting them to telecoms (which they didn’t do), telecoms will now cost prospects straight through airtime.
On the coronary heart of end-user billing is a system designed to enhance transparency, accountability, and consistency in how USSD prices are utilized to subscribers.
Transparency is enhanced by a brand new immediate that seems earlier than every transaction. Clients will now obtain a transparent message informing them of the ₦6.98 charge and asking for his or her consent to proceed. This ensures customers are totally conscious of the costs and might select whether or not or to not proceed with the transaction.
Accountability is constructed into the method. Cellular Community Operators (MNOs) can solely deduct the charge after the shopper’s financial institution confirms it is able to course of the transaction. This safeguard helps scale back failed classes and eliminates the chance of shoppers being charged for companies that have been by no means accomplished.
Consistency comes by means of a standardised messaging format now adopted by all telecom suppliers. Regardless of the community, prospects will obtain uniform, easy-to-understand updates on the standing of their USSD transactions, bettering the general consumer expertise and lowering confusion.
In line with Linda Saint-Okafor, Chief Enterprise Enterprise Officer, MTN Nigeria, airtime purchases and knowledge top-ups through USSD stay free—however provided that prospects use particular “direct strings” (e.g., 73710,000#) moderately than the basis menu (e.g., *737#).
“There’s what we name the basis string, direct string, or the lengthy string,” Saint-Okafor mentioned throughout a media webinar organized by the telco. “For instance, GTBank’s *737# is the basis string. Whenever you dial the code, we cost you for that. However if you wish to purchase knowledge and go to the telecom operator straight, it is not going to be charged.”
What this billing means for subscribers
In sensible phrases, nothing is new concerning the USSD cost itself. Clients have all the time paid for it, whether or not they realised it or not. The main distinction is the place the cost is deducted: from airtime, not their checking account.
This variation is important for subscribers in a number of key methods. First, it brings better visibility and consent into the billing course of. Customers now see the ₦6.98 cost earlier than any USSD transaction takes place, eliminating the issue of hidden or sudden deductions. This transparency empowers customers to make knowledgeable selections and reinforces their management over cellular monetary interactions.
Secondly, the system results in fewer failed prices. A pre-transaction test ensures that the consumer’s financial institution is able to course of the request earlier than any deduction is made. This reduces the probability of being charged for failed or incomplete classes, a standard frustration.
As well as, the change enhances the general buyer expertise. With a standardised messaging format throughout all cellular networks, customers can extra simply perceive what’s occurring throughout transactions and resolve points extra shortly once they come up. This consistency minimizes confusion and improves service supply.
Lastly, the coverage shift helps restore belief in cellular monetary companies. Years of unclear and sometimes questionable billing practices had eroded consumer confidence. By prioritising transparency and consistency, the brand new system takes a significant step towards rebuilding that belief.
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